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5th Dec 2021

HOW THAILAND HAS TAKEN OVER INDIA AS THE 2ND HIGHEST SUGAR EXPORTER IN THE WORLD

FIND TOP COUNTRIES THAT IMPORT SUGAR FROM INDIA || HOW THAILAND ESTABLISHED ITSELF AS A SUGAR EXPORTING COUNTRY GIANT

Sugar As A Commodity

Approximately 110 countries currently produce sugar from either cane or beet, with eight producing sugar from both cane and beet. Sugarcane accounts for about 80% of global sugar output on average.

Sugar crops provide cattle feed, fiber, and energy as well as food options. Biofuels (sugar-based ethanol) and co-generation of electricity are two examples (cane bagasse). Sugarcane is widely considered to be one of the most important and efficient biomass sources for biofuel generation. Sugar production and processing are linked to a variety of environmental and social challenges, and sugar crop growers, processors, as well as energy and food industries, are looking for solutions to address concerns about sugar production, biofuels, and sustainability.

Top 10 Countries Importing Sugar From India 

*(Data sourced from  credible sources and figures are approximations only)*

Government policies, both at the national and state levels, have been critical in the growth of the sugar sector in India. Starting with sugarcane and ending with sugar, India's sugar sector, like that of many other countries, is highly regulated. Even the by-products are regulated by the government. The national policy's key goals are to ensure a fair price for cane growers, appropriate returns for industry, and a reasonable supply of sugar to consumers.

Sugar industry economics in India are more sophisticated than sugar industries in many other countries. This is due to the presence of a huge cottage business producing open-pan sugar, notably gur (solidified cane juice) and khandsari, alongside the centrifugal mill sector (semi-white centrifugal sugar). On the demand side, the two businesses compete for cane supply, but white sugar complements and replaces the cottage industry's goods.

The white sugar business in India is very important economically. After the cotton textile industry, it is the second largest. Sugarcane farmers and their families account for around 7% of the rural population, with a population of about 35 million. The sugar sector employs 350 000 people and generates significant indirect employment through a variety of activities.

Thailand Sugar Forecast

*(As per USDA 2020-2021 October)*

Due to increased area harvested, higher sugarcane yields, and ideal weather, Thailand's production is expected to rebound roughly one-third to 10.0 MTS. During the sugarcane tillering and elongation growth stage, the average precipitation was 5-7 percent over average in major growing locations, according to the Thai Meteorological Department. Higher demand for direct sugar consumption and food services is predicted to boost consumption.Due to the recovery in output, exports are predicted to more than double, while stockpiles are expected to fall below the record set in 2020/21 due to increasing exports.

Why is India’s sugar export declining?

Sugar production in India is expected to fall slightly to 30.5 MTS in the 2021-22 season as more sugarcane is diverted for ethanol production.

Sugarcane slated for 2 million MTS of sugar production was diverted for ethanol production this season, whereas sugarcane meant for 3.5 million MTS of sugar production will be diverted in the 2021-22 season.

Sugar output, on the other hand, will be sufficient to fulfill domestic demand, which is predicted to rise by 3,00,000-4,00,000 MTS from 26.3 million MTS to 26.5 million MTS in the 2021-22 season.

Domestic consumption is expected to reach 26 million MTS in the 2020-21 season.

How has Thailand become a sugar exporting giant?

Due to current high worldwide prices and an anticipated spike in sugarcane production, Thailand's Cane and Sugar Corporation (TCSC) released the country's first 2021-22 Quota B sugar tender on March 2, 2021, some five months earlier than previous seasons.

The first tender for the new raw sugar kicked off with around 48,000 MTS of Thai HiPol raw sugar for shipment from March to May 15, 2021.

TCSC's Thai Quota B tenders cover 400,000 MTS of raw sugar contracts for a season and usually attract multiple trading houses to submit bids. The TCSC is in charge of pricing and selling raw sugar under the quota.

This has prompted Thai sugar producers to take advantage of the chance to begin charging in sugar for cargo loading.

The Thai production costs are far lower than [current] futures pricing, and we anticipate a larger crop. The big inverse [futures spread] in March and May 2022 will also push Thais to price.

Thailand's sugar production is likely to increase for the 2021-22 marketing season (October-September), with industry sources anticipating a 40 percent increase in sugarcane production year over year to 90 million to 95 million MTS.

Thai sugarcane output is expected to reach 90 million MTS in 2021-22, with room for growth.

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